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Author Topic: Who controls bitcoin?  (Read 1459 times)
DannyHamilton
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April 08, 2013, 05:33:19 AM
Last edit: April 08, 2013, 07:11:58 AM by DannyHamilton
 #21

- snip -
2. Correct me if I am wrong, but it is not the majority of bitcoin users that need to except the changes. Rather, a majority of miners. If bitcoin grows to be a commonly used currency, the miners will make up a small fraction of the total users. So when we are talking about the majority, we really mean the majority of a small subset. The problem with this is that the miners may have a different perspective on certain proposed changes. For example, it is reasonable that many of the miners would support fixing the solution reward at some number of bitcoins instead of having it trail off to zero. This would be more profitable for the miners. Logically, the normal users would be against this, but reference point one above. The normal users could be convinced through misinformation that this is a good solution.  Those that stand to benefit could argue that the supply of bitcoins needs to increase to help the economy move along, or to make transactions easier, or any other lie they can come up with to convince the majority. This is not unprecedented in history.
- snip -
(emphasis added by me)

You are wrong.

Every full node peer on the network verifies every block they receive before relaying them and adding them to the blockchain. If 99% of the miners are publishing blocks that have a larger reward than the peers allow, those blocks will be relayed among those miners, but will never make it to the users or the miners that don't accept that rule.  They will essentially have created their own cryptocurrency separate from bitcoin (though they may try to call it bitcoin as well).

Now if the majority of users decide to go along as well, then you will have something that can actually be used/exchanged with others, and those who stick with the old software could find themselves with something that nobody else accepts and quickly loses value.

As you can see, it requires the majority of peers, not miners.
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April 08, 2013, 06:10:33 AM
 #22

Maybe Aliens do..
JoelKatz
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April 08, 2013, 09:18:38 AM
 #23

Every full node peer on the network verifies every block they receive before relaying them and adding them to the blockchain. If 99% of the miners are publishing blocks that have a larger reward than the peers allow, those blocks will be relayed among those miners, but will never make it to the users or the miners that don't accept that rule.  They will essentially have created their own cryptocurrency separate from bitcoin (though they may try to call it bitcoin as well).
The 99% of the miners would devote 2% of their mining power to ensuring that no transactions ever survived in the longest chain in the fork they consider illegitimate. 51% of the mining, if sufficiently organized, can enforce whatever rules it wants. They get to decide what chain is usable.

I am an employee of Ripple. Follow me on Twitter @JoelKatz
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April 08, 2013, 09:28:47 AM
 #24

As you can see, it requires the majority of peers, not miners.

So, is this where the other cryptocurrencies all originated? From people switching the rules a bit and then agreeing, based on peer exchange?
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April 08, 2013, 10:13:00 AM
 #25

As you can see, it requires the majority of peers, not miners.

So, is this where the other cryptocurrencies all originated? From people switching the rules a bit and then agreeing, based on peer exchange?
YUP.

"The whole problem with the world is that fools and fanatics are always so certain of themselves and wiser people so full of doubts." -Bertrand Russell
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April 08, 2013, 12:37:54 PM
 #26

The more I look into it, the more I love the concept.  Cheesy
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April 08, 2013, 12:39:42 PM
 #27

The mass, because if everyone is using the same protocol there isn't any room for manipulation (in theory, you can never be 100% sure).
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April 08, 2013, 01:18:00 PM
 #28

Mr. Satoshi controls it of course Smiley
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April 08, 2013, 02:48:47 PM
 #29

A majority of users would have to upgrade the software for the cap to be changed.  Even if 99% of mining power moved to the new cap, the old software would not be compatible with the new fork.  It would split the network in two, since users of the old version would see a block that includes a subsidy larger than what is allowed, thus considered an invalid block.

So what would the economic impact be of this sort of split? Imagine a 49/51 split for a protocol change, many of the 49% may suddenly dump and sell off their BTC. Or maybe this sort of thing is just as common in fiat currency like the Cyprus banks changing the rules?
BitcoinGirl325
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April 08, 2013, 02:54:35 PM
 #30

The 2 largest mining pools already control 53% of the nodes: http://blockchain.info/pools

So for a change to be accepted by "the majority", only 2 pools need to accept it.

This is the current weakness and vulnerability (and potential downfall?) of the Bitcoin system.

If you enjoyed my post or found it helpful, please feel free to donate BTC to me at: 15UKsghaHeLAtidySEHmPXBWRjBMM1Tw4u
DannyHamilton
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April 08, 2013, 02:57:00 PM
 #31

The 2 largest mining pools already control 53% of the nodes: http://blockchain.info/pools

So for a change to be accepted by "the majority", only 2 pools need to accept it.

This is the current weakness and vulnerability (and potential downfall?) of the Bitcoin system.

Of course if those two pools tried to make a change, there'd be a significant probability that miners would move to a different pool and they'd quickly lose their 51%+ status.
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April 08, 2013, 03:33:59 PM
 #32

Thanks for all of the informed responses guys. I think I am going to have to read the bitcoin research paper published by Satoshi to find the real answer. I am sure I will be back with more things to talk about.
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